Barry Salzberg is a Deloitte lifer. After rising through the ranks of the company over a career spanning more than 30 years, Mr. Salzberg has seen his fair share of economic highs and lows. In 2011, he was appointed to the position of global CEO, a role that has afforded him a bird’s-eye perspective on the global economy. During a recent visit to Vancouver, Mr. Salzberg spoke with Dan Ovsey about his views on global markets, the impact of the looming U.S. election and investor confidence in the U.S. Following is an edited transcript of their conversation.

Q: Many experts refuse to rule out the possibility of a double-dip recession – in the U.S. and globally. Do you see this as a real threat or an unlikely scenario?
A: I speak with my economists all the time and they do not believe we will likely have a double-dip recession. Of course, they would also say that we will likely see very slow economic growth in 2013 with periodic crises and resolutions largely concerning the European situation. They would not see a double-dip situation. In fact, today there was some reasonably positive news out of France where the data from July and August would suggest the economy showed signs of improvement. And Germany, showed similar kinds of data. While Europe is clearly in a mild recession, I’m not sure the economists are wrong in their view of the double-dip. But there’s clearly some risk with respect to how the economic crisis persists and evolves. Clearly, the impact on economies by virtue of the markets slowing down in growth is yet to be seen. The U.S. is slowing down, Canada will be slower and China will be slower. We have to see how it goes, but clearly we’re not looking for robust growth.

Q: You mention that France and Germany seem to be showing some positive signs of economic development, but shouldn’t we be focusing more on the struggling economies of Portugal, Spain, Greece and perhaps Ireland?
A: I was recently in Ireland and that would be a good example of a country that was, at one point, quite high, and during the recession went to a reasonable low, and might be the country that best implemented appropriate actions to get back to the upward trend. Most people would say that Ireland is in a much better state than before. Spain is a difficult environment today in light of the ECB’s announcement of the unlimited bond purchases. Their bond yield fell and there’s question whether or not Spain will seek a bailout and so it’s hard to say broadly that when I talk about France doing better or Germany being reasonably stable that that applies to all the other markets, because you do have places like Spain and others that are still suffering a little bit. But in the aggregate, I think it’s pretty clear that Europe’s in a recession.

Q: Aside from the crisis in Europe, what do you see as the biggest threats to the global economy?
A: I would say the slowdown in the emerging markets clearly has a fundamental effect on world economies. Clearly Europe’s slowdown has contributed to the slowdown in China’s growth. Other Asian economies that depend on China are also slowing down as a result. There’s a variety of implications broadly. The U.S. is also in slow-growth mode and there’s clear connections between it and major emerging markets and Europe. Also, if you think about the global economy more broadly. – in addition to the possibility of any eurozone failure, you’ve got the possibility of continued fiscal crisis in the U.S. and the possibility of oil price impacts depending on Middle East tensions. So there are a number of implications to the global economy worldwide besides Europe.

Q: How will the upcoming U.S. election affect America’s economy and what are the implications for the greater global economy?
A: I kind of look at the direction of the U.S. economy as being dependent on a wide range of issues, not just U.S. based, but internationally based. Many of those issues are not controlled by elected officials in the U.S. but in many ways are every bit as important as the outcome of the election. While at times it’s difficult to distinguish between the progress of the economy and the impact of the election, I think at the end of the day, the winner of the election will create more certainty and predictability. It’s the uncertainty that’s right now killing us in many ways. In fact, when I speak with clients, it’s the uncertainty of what will occur that causes them not to invest in their future and do things that would have long-term strategic value. Back specifically to the election, I think what will be key is the ability of whoever wins to reach out to the opposing party and seek bi-partisan compromise, and I think that would apply across the board to a broad range of issues. So, while there are things that are clearly unique to individual parties, at the end of the day for there to be any major positive impact on the economy and the broad operating environment it will be because of bi-partisan compromise.

Q: The governor of the Bank of Canada – our national regulatory body of monetary policy – has accused Canadian businesses of hoarding cash stockpiles. Are U.S. companies investing confidently in R&D and other growth mechanisms or are they still planning for a rainy day?
A: I think that is pretty common everywhere around the world, although clearly in the U.S there’s more of that as we understand that many of the companies in the U.S. are pretty cash rich and they’re not investing in the long term because they don’t have the confidence to add permanent head count to their operations or can’t predict where the future might go. So, many companies are – because of the economic uncertainty and notwithstanding their cash rich position – focusing more on the short-term operational requirements instead of the strategic thinking. I think that as we’re talking to clients and we’re giving advice, we are suggesting to them that they need to find the right balance between short-term operational requirements and using the cash they’ve accumulated for investment and long-term strategic thinking. That’s inevitable in an environment in which volatility is high and uncertainty is great. But when you have an opportunity to take advantage of in a difficult economic environment, companies that are cash rich have a greater tendency to invest more and should invest more or should make acquisitions for their future.

Q: How have the Obama administration’s reshoring incentives been received by business leaders in the U.S.? Has there been a movement to reshore or has the response been fairly muted?
A: It’s a mixed bag. It depends on each company’s circumstances and their position already implemented and how do you move off of that strategy. Clearly some companies are reshoring and others continue to not. It is a function of what it is you’re talking about. What type of offshoring are you doing? What types of jobs and skills are needed? It’s making sure that you’re properly executing against the company’s strategy. In large part, the issue here, of course, is job creation. In the U.S., we’re still talking about over an 8% unemployment rate and a reasonably low number of new jobs being created as we go. So, the whole purpose of the concept of reshoring is to create jobs and to the extent that you can (do that) and it makes sense to do that, and the skills and opportunities are there, you’re seeing companies (make that move).

Q: Which sectors do you see as having the greatest uphill battle in coming out of this recession and why?
A: One of the sectors that has been hit by the recession and continues to suffer would be the financial services sector. While there are parts of that sector that are doing well and have rebounded in terms of jobs, intuitively I would say – although I don’t have the data in front of me to establish that – that might be a sector of employment that wasn’t as robust as it was before.

Q: With the U.S. currency still devalued, do you see many of your clients taking the opportunity to bolster their exports – particularly to emerging markets – or are they just trying to keep their heads above water?
A: I haven’t noticed anything materially different. I mentioned earlier that China went down in part because of the reduced exporting from Europe. pSo, there’s clearly a connection there and there’s clearly opportunities there. I couldn’t say if there was one group of clients that is increasing or decreasing their exports.

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